Cameron Scott v. Teranet Inc., 2012 HRTO 2315

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Cameron Scott

Applicant

-and-

Teranet Inc.

Respondent

DECISION

Adjudicator: David Muir

Date: December 10, 2012

Citation: 2012 HRTO 2315

Indexed as: Scott v. Teranet Inc.

APPEARANCES

Cameron Scott, Applicant

Self-represented

Teranet Inc., Respondent

Julie O’Donnell, Counsel

INTRODUCTION

1This is an Application filed under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging discrimination with respect to employment because of disability.

2In its Response (Form 2) the respondent requested that this Application be dismissed because the applicant had signed a Full and Final Release in its favour. In the Application, the applicant suggested that he had been tricked into signing the release. The legal issue to be determined in these circumstances is whether or not it would be an abuse of process for the Application to continue in the face of the Release, see for example, Bielman v. Casino Niagara, 2009 HRTO 123 (“Bielman”) and Perricone v. Fabco Plastics Wholesale (“Perricone”), 2010 HRTO 1655.

3A hearing was held on Monday December 3, 2012 to hear the parties’ submissions on the issue.

background

4The applicant had been employed by the respondent for 14 years. In October 2010 he was laid off from work in the London office. The applicant grieved this lay-off. The applicant exercised his rights under the collective agreement and bumped into a position in Toronto and began working there in March 2011.

5At the first day of the grievance arbitration in July 2011 the parties engaged in settlement discussions which would have involved the applicant taking a severance package. No settlement was reached at that time. Further dates were set but cancelled as a consequence of the applicant’s medical leave which began in mid-August 2011.

6In July and August 2011 the employer noted a number of disciplinary matters which it wished to raise with the applicant and apparently might have done so except for the fact that the applicant went on leave on August 19, 2011.

7The applicant returned to work on February 1, 2012 and indicated that he was fit for full duties.

8There were a number of meetings – the applicant believes five or six – in the week after the applicant returned to work where the parties met to discuss the disciplinary issues previously identified. The applicant was represented in these meetings by his union. At some point during these meetings the parties entered into renewed discussions of the applicant taking a severance package and leaving his employment.

9The applicant claims that this discussion was initiated by the respondent. The respondent believes that it was the applicant’s union representative who initiated the discussion. In my view nothing turns on who raised it at this stage. Suffice it to say that the parties over a couple of meetings negotiated an exit package.

10The applicant acknowledges that he actively participated in these discussions, was represented throughout by his union and ultimately agreed to the proposed settlement and executed the settlement documents on February 13, 2012.

11The applicant does not claim that he advised anyone at the time of these events that he was suffering from a mental disability and was incapable of understanding the contents of the discussions.

12The applicant argued at the hearing that at the time that the settlement and release were being negotiated he was not sleeping well and was stressed. He argued that the respondent would have known that he was unwell or “would have had legitimate concerns about it”. The applicant argued that on the day that he signed the settlement documents he told his union representative that he had not slept the night before and that he did not read the documents before signing them, rather he relied on his union’s advice which included a review by union counsel and the Local President.

13The settlement included a Full and Final Release in favour of the respondent which included the following language:

I, Cameron Scott, (hereinafter referred to as the "Releasor" which term includes my heirs, executors, administrators, successors and assigns), in consideration of the payment by Teranet Inc. (hereinafter referred to as the "Releasee" which term includes its employees, servants, officers, agents, subsidiaries, affiliated companies, related companies, successors and assigns) of the amount of $2.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, in full satisfaction of all claims and demands of the Releasor against the Releasee, do hereby release and forever discharge the Releasee of and from all manner of actions, causes of actions, suits, debts, dues, accounts, bonds, covenants, contracts, claims and demands whatsoever which against the said Releasee the Releasor now has or can, shall or may hereafter have arising out of or in any way connected with the employment of the Releasor by the Releasee, the cessation of such employment or the obligations, statutory, contractual or otherwise of the Releasee to the Releasor in respect thereof and including, without limiting the generality of the foregoing, any benefit entitlements, any statutory entitlement to wages, termination payor severance pay under the Employment Standards Act, 2000, S.O. 2000, cAl, any and all claims under the Ontario Human Rights Code, R.S.O. 1990, H.l9, as amended (the "Code") and any and all claims under a collective agreement between the Releasee and the Ontario Public Service Employees Union, Local 507 and including any right to reinstatement under such collective agreement or otherwise.

14The original settlement included the payment of a retiring allowance, with a payment to be made in 2012 and a further and much larger payment on January 1, 2013. On March 8, 2012 after executing the settlement the applicant wrote to the respondent and asked that the 2013 payment be moved forward. The respondent agreed and the payment was made in March 2012. On April 6, 2012 the applicant requested a further payout from the respondent. The respondent took the position that the requested sum was included in the payments already made.

15On April 10, 2012 this Application was filed.

16The applicant led no evidence that he was mentally incapable at the time that he executed the settlement documents.

Findings and analysis

17The Application is dismissed. My reasons for this conclusion follow.

18The Code does not expressly bar an Application because a Release has been executed. The fact that there appears to be a binding settlement does not end the enquiry. In Bielman, above, the Tribunal held:

The Code does not explicitly bar applications such as this where a release has been signed by the applicant. In each case where a respondent requests early dismissal of an application, the Tribunal must decide whether, in the circumstances, it would constitute an abuse of the Tribunal’s process to allow the application to proceed to a hearing on the merits. An important consideration in that analysis is the respondent’s reasonable expectation that a release of this kind will bring finality to any employment related dispute they may have with a former employee.

19In Perricone, above, the Tribunal commented at para. 39 on the general analytical approach in a case such as this:

The applicability of the abuse of process doctrine in the Release context is readily apparent when one considers that one of the principles on which the doctrine is based is the principle of finality, described as “so crucial to the proper administration of justice.” (Donald J. Lange, The Doctrine of Res Judicata in Canada, Markham, Ontario: Butterworths, 2000, at 347-48, as cited in CUPE, supra, at para. 38). When two parties contract to settle legal matters between them, the principle of finality demands that the contract be given effect and prevents parties from litigating settled matters, unless there are compelling reasons to set the contract aside altogether. Thus, in determining whether it would be an abuse of process to permit the Application to proceed, the question is … whether the contract (i.e. Release) she entered into is legally binding, and final….

20Having reviewed the material filed and heard the submissions of the parties I find that the settlement is binding on the applicant and this Application must be dismissed.

21The applicant argues that when it came time to sign the settlement documents he was under stress and may have been depressed. He was not sleeping well. . He also argues that it would be unfair to hold him to them because the discipline they were threatening him with was based on fabrications and was simply part of a strategy to terminate him. The applicant also believes that the respondent knew or ought to have known that he was suffering from depression because they questioned his ability to work.

22The fact that the respondent may have wanted to terminate the applicant’s employment is not relevant to the question here. Whether they did or did not want to end the employment relationship the applicant signed a full and final release in favour of the respondent in exchange for a substantial severance payment in the form of retiring allowance.

23In these circumstances the only basis upon which the applicant can be released from his obligations under the settlement would be for him to establish that he lacked the legal capacity to execute them by reasons of a mental disability at the time. Even on the applicant’s submissions taking them at their highest, there is no evidentiary basis for this claim in these circumstances.

24In Bjelakovic v. Accenture Global Services, 2008 CanLII 32802 (ON SC) at para. 15, the Court considered the test for finding a Release unenforceable where an allegation of incapacity was made:

A contract is binding on a person of unsound mind unless: (a) the person of unsound mind was incapable of understanding what was being done; and (b) the other party had knowledge, either actual or constructive, of the incapacity: Fyckes v. Chisolm (1911), 19 O.W.R. 977 (H.C.J.) at paras. 8-9; H.G. Beale, ed., Chitty on Contracts, 29th ed. (London: Sweet & Maxwell, 2004) at 608-9; Fred D. Cass, The Law of Releases in Canada (Aurora: Canada Law Book, 2006) at 186-7. The onus is on the person asserting the incapacity to establish both her incapacity, and the other party's actual or constructive notice of that incapacity: Fyckes, para. 10. If there is a finding that a person must have had a suspicion that a party lacked capacity, and deliberately refrained from inquiring or satisfying himself about the other party's capacity, constructive notice will be established: Grant v. Imperial Trust Company, 1935 CanLII 335 (SCC), [1934] O.W.N. 370 (Ont. C.A.), affirmed 1935 CanLII 327 (SCC), [1935] 3 D.L.R. 660 (S.C.C.).

25Accordingly, even if the applicant was suffering from a mental or cognitive impairment that rendered him incapable of understanding what was being done in the context of the execution of the settlement documents, which I have found was not the case, the law may also require that the respondent have had actual or constructive knowledge of such incapacity. In coming to this conclusion, I found the following from Walkinshaw v. Complex Services, 2010 HRTO 2318 at para. 32 on point:

There was nothing in the evidence that would have given the three representatives of the respondent who attended the meeting any reason to question her legal capacity to sign the release. As the respondent notes, case law suggests that a contract is binding on a person of unsound mind even if that person did not understand its meaning, unless the other party had knowledge, actual or constructive, of the incapacity. See Bjelakovic v. Accenture Global Services, [2008] O.J. NO. 2660 (On. S.C.). Here, there had been no request for accommodation, and as outlined above, the three men conducting the termination meeting were not privy to any knowledge or details of the applicant’s disability. Despite her disability, I find on the balance of probabilities that the applicant had a general understanding of what was happening at the meeting and thus grasped that she was signing documents that signified acceptance of a severance package. The applicant has not established that she did not have the legal capacity to sign those documents.

26In this case, although the applicant had been off work for a period of time, he had returned and warranted to the employer that he was able to return to work without restriction. Although the applicant indicated that he believes that the respondent was not sure that he was fit to return to work, there is no evidence of that and in any case fitness to work and legal capacity to execute the settlement documents are not the same thing. There is no basis to conclude that the respondent had actual or constructive knowledge of any mental incapacity at the time. As indicated the applicant provided no evidence that he lacked mental capacity at the time of the settlement discussions and the execution of the settlement documents.

27In all of the circumstances I find that there is no basis to conclude that the applicant lacked legal capacity to execute the settlement documents. Accordingly the applicant is bound by them and is barred from proceeding further with this Application on the basis that it would be an abuse of process to do so. The Application is dismissed.